How to choose a Broker for trading

Before one starts to trade, one has to open a trading account with one of the licensed brokers by Sebi (Securities & Exchange Board of India). Now the big question comes is which broker to open the account with?

Your choosing a Broker would depend on the following things

  • Brokerage charged on delivery
  • Brokerage charged on trading intraday
  • Quality of Research and Trading Ideas given by broker
  • Credibility of the Broker
  • How far is broker office from your place
  • How is the trading terminal of the broker if you are trading online
  • Does the broker have CDSL as well as NSDL Depository
  • Is the broker an old established broker or has he recently set up his business
  • Does he have complaints by investors
  • Does he have adequate manpower to give you support
  • Does he have commodity, currency, equity and derivatives permission
  • If he does his own trading, then is it at arms length with his advice to clients
  • The trading terminal whether has technical analysis tool free or not
  • How often do you trade will make a difference in your brokerage
  • If you are not internet savvy, then you will require an offline broker
  • Does the broker have IPO facility or not

Overall, the above are some of the points which one must keep in mind before opening an account with the broker. I know of brokers charging a high brokerage yet they have clients walking to them like Icici direct because they are backed by big institution which has credibility. There are new brokers like zerodha which have established themselves in last 5 years and are no less than anyone else and today their volume of trading is only going up. So one has to judge on all parameters.

30 years ago it was tough to open a trading account in India with then existing brokers and one had to pay a security deposit to open an account but today the situation has just reversed. The brokers are looking for clients and there is no question of security deposit. Earlier the brokerage used to be very high. I remember the brokerage use to be something like 1 to 2 percent on delivery trades 25 years back just like mobile charges use to be 10 rupees a minute. Now times have changed, both have come down. Today brokerage has come down to even just 10 or 20 rupees a trade in which quantity is undefined.

Some of the good online discount brokers are : arranged alphabetically

  • Fyers
  • RKSV
  • SAS Online
  • Trade Jini
  • Trade Smart Online
  • Trade Plus Online
  • Zerodha

Some of the good full service brokers are : arranged alphabetically

  • Angel
  • Axis Direct
  • Bonanza
  • Geojit BNP
  • Globe Securities
  • Hdfc Securities
  • Icici direct
  • Idbi Paisa Builder
  • IIFL
  • Kotak Securities
  • Motilal Oswal
  • Reliance Money
  • Religare
  • Sharekhan
  • SMC Global
  • Ventura

If I have forgot to mention name of any big broker, please put in the comment below so that I may update the same as I plan to do a comparison between all. Also please do leave a comment about the broker of your choice.

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